Joseph Palmieri Jr. has plans to start a medical marijuana grow operation in a facility he owns on Burr Court in Bridgeport, Conn. Palmieri stands beside one of the pods which will contain his plants.
Photo: Autumn Driscoll

Joseph Palmieri, who operates Palmieri Farms, poses in the tree farm on his property in Easton, Conn. on Tuesday June 25, 2013. Palmieri is in the process of becoming one of the first growers of pot for medicinal use in the state.
Photo: Christian Abraham

Joseph Palmieri, who operates Palmieri Farms, poses in the tree farm on his property in Easton, Conn. on Tuesday June 25, 2013. Palmieri is in the process of becoming one of the first growers of pot for medicinal use in the state.

Joseph Palmieri, who operates Palmieri Farms, thumbs through his project binder at his home in Easton, Conn. on Tuesday June 25, 2013. The binder is a record of Palmieri's endevour in becoming one of the first growers of pot for medicinal use in the state. A test bud he had recently grown in Colorado can be seen in the photo by his right hand. Colorado is where Palmieri purchased all the special equipment need to grow the marijuana here in Connecticut.
Photo: Christian Abraham

It's Connecticut's new gold rush and prospectors from far and wide have been quietly streaming into the state making a grab for a piece of the potentially lucrative medical marijuana industry.

The state won't even start accepting proposals for marijuana growers or sellers until later this year, but the would-be pot kings are way ahead of the government officials.

There are cultivation plans pending in Bridgeport, West Haven, Watertown and Middletown, to name a few. Entrepreneurs, some with experience in Colorado, where marijuana was legalized for recreational use last year, are lining up to convince Connecticut that they should be the ones chosen to grow the state's newest crop.

"There is a tremendous gamble in this, but if we stick to following the rules, it will be a good business," said Joseph Palmieri Jr., an Easton farmer who is hoping to start growing the crop in an old factory in Bridgeport.

The interest is easy to understand: Pot isn't the outlaw drug of the peace and love movement anymore, it is now big business. Price indexes track the ups and downs of cannabis as if it were a commodity like soybeans. Websites review the quality of designer brands of pot and direct consumers to the nearest sellers, known as dispensaries. Advertising agencies contemplate branding various strains of medical marijuana and marketing them as they would new shampoos.

Then there are the money folks. Venture capitalists are pouring money into research and development. Angel investors are plunking down cash, trying to secure some of the state's empty factories and ready them for massive, indoor hydroponic farming operations.

All this for a weed that, until recently, was completely illegal under Connecticut law. In some places, aggressive business plans are already running up against local zoning regulations.

Legal haze

For some local officials, the concept of legal marijuana -- for medicine or not -- raises anxiety; it is still a federal crime to grow and sell marijuana. In the town of Shelton, officials are considering a moratorium on cannabis-related businesses while they consider the state's soon-to-be adopted regulations.

Earlier this month, the West Haven Planning and Zoning Commission turned down a request by a Fairfield-based company, Advanced Grow Labs LLC, for an expedited vote on a simple revision to a site plan. The would-be marijuana growers want to convert a vacant, $1.3 million, 61,000-square-foot manufacturing building hard by Interstate 95 to an indoor farm.

Their request was routine -- to move a door, reconfigure wheelchair access and add a concrete pad for a trash container -- but Gene Sullivan, chairman of the commission, led an effort to delay action on the proposal.

"Federal law doesn't allow the manufacture or sale of marijuana, but state law is going to," Sullivan said. "I always thought state law superseded city law and federal law superseded state law. I always thought whatever provided greater protection. I'm concerned that we not act hastily."

The delay surprised Diane W. Whitney, the attorney representing Advanced Grow Labs, who was hoping for a same-night approval.

"It's a relatively straight-forward review with certain criteria in the regulations, and if you meet regulations, you're approved," she said. "On the basis of considering those things, it's not complicated at all. But this is a use that is brand-new in Connecticut and has been controversial in the past."

Some municipal officials, however, look at the pot business and see dollar signs. They hope the new industry could shore up declining tax bases and create jobs.

"We treat it like any other economic development," Bridgeport Mayor Bill Finch said. "It's highly regulated and the sites have to be very secure. It's potentially a good use for many of the old industrial buildings that are just decaying. We hope that something will come of this."

`Gateway' law

In fact, there is very little wiggle room for local officials to oppose the state's new industry, short of local ordinances banning marijuana-related uses that would be imposed by town or city councils.

State Attorney General George C. Jepsen acknowledged that case law on medical marijuana is "highly unsettled and developing."

William M. Rubenstein, the state's consumer protection commissioner, said that when proposals are solicited, would-be growers and dispensers will have to show they can quickly occupy a location, through either ownership, lease or other options.

As many as 10 growing facilities will be approved following a meeting next month of a legislative panel that will vote on proposed regulations regarding the production, sale and use of the drug. The number of dispensaries is undetermined at this point.

Matt Villmer, a Ridgefield-based attorney licensed in Florida, represents potential growers who would rather stay anonymous at this stage. His clients are concerned that local zoning opposition could make it harder than regulators imagine, he said.

"Our thoughts are that a lot of cities and local governments will pass laws against dispensaries, and the entire point of medical marijuana can be eviscerated," he said. "Whoever operates production facilities or dispensaries will have to buy a building,"

Villmer declined to identify his clients, but said they are well-funded and new to the business.

"They're starting brand new, but they have the cash."

Chris Walsh, editor of the Medical Marijuana Business Daily, a Providence, R.I.-based trade journal that monitors the industry, said "Not in My Back Yard" efforts are not unexpected.

"This is par for the course, especially in areas on the East Coast," he said. "New Jersey is a textbook example of entrepreneurs running into local barriers and the NIMBY mentality."

There is currently only one palliative marijuana dispensary for patients in the entire state, he said.

In Massachusetts, where voters approved medical marijuana in November, at least 10 municipalities have adopted moratoriums against pot businesses.

Walsh estimates the annual sales of medical marijuana in Connecticut could be a relatively small $2 million, depending on how many patients are approved. So far 723 patients, with a variety of specific medical conditions, have been certified by their doctors. Each will be able to obtain up to 2.5 ounces a month of marijuana-based products.

"This is going to be a small market, from a business perspective," he said, but the economic ripple effect will include legal services, consulting and equipment for cultivating marijuana plants.

Of course, if medical marijuana is just the gateway to full-scale legalization, as it was in Washington and Colorado, then the potential market would be much bigger.

High cost

Matt D. Cook, a former Colorado regulator who now works in the industry, said that the price of weed for patients creates another potential pitfall for businesses.

"You have to create accessibility without flooding the market," said Cook, who represents a Colorado growing and dispensing operation that is hoping to do business in Connecticut as CThree. "There will be a heck of a demand, and hopefully the state will find the balance and allow people to build a business."

Rubenstein and consumer protection officials have been tracking pot prices on the website cannabispriceindex.com, which lists the price of various strains of marijuana in markets where it is legal. He expects patients will not have to pay more than $180 to $280 per ounce.

"We're hoping to be more competitive," he said.

Palmieri, whose family has farmed in Easton for three generations, said he resents the out-of-state intrusion on the market.

If granted approval, Palmieri plans to use a series of fully contained industrial storage pods to operate a hydroponic growing system that he developed last year in Colorado, where he could experiment legally.

"I went to Colorado for educational purposes," said Palmieri, who also owns Connecticut Tank Removal Inc., an environmental clean-up company in Bridgeport. "I'm not a Colorado company and I'm not tied to one."

He speculated that Colorado's saturated pot market has caused businesses to migrate east from the Rocky Mountain State. Colorado-based businesses are involved in pitching proposals in Watertown, West Haven and Middletown.

"The market's flooded and they're trying to get into the potentially lucrative Connecticut market," he said.

He expects to spend half a million dollars to begin his growing operation, if the state accepts his proposal.

David Kimmel, of Ledyard, founder and president of Vintage Foods Ltd., which is also planning on pitching the state for a license, is working with research and development teams in Israel and Canada that are cultivating various strains of marijuana.

And a glance at websites like Leafly.com show that there are now hundreds of brands of marijuana being marketed to consumers, each with claims to treat specific symptoms and promises of unique results. Sufferers of anxiety and depression, for instance, can choose from 35 brands -- from Acapulco Gold to Wonka's Bubbilicious -- which promise to make them creative, focused and talkative, among other things.

"My goal is to bring it in as inexpensively as possible," said Kimmel, whose company recently won Kosher status for its orally ingested marijuana medicines. "I want this medication to be affordable."

Kimmel wouldn't say where in Connecticut his company is hoping to set up shop. No need to tip off the competition.